Virginia Life and Health Practice Exam

The term referring to a clause that prevents an insurance company from denying a death claim after a specified period of time is known as the incontestability clause. This clause is essential in providing reassurance to policyholders and beneficiaries, ensuring that, after a predetermined time—usually two years—the insurer cannot contest or dispute the validity of the policy based on mistakes or misstatements made by the insured at the time of application. This protects consumers by making it difficult for insurers to refuse claims based on health issues or inaccuracies that were disclosed during the underwriting process after the grace period has elapsed.

This provision fosters trust in the insurance process, allowing policyholders to have confidence that their beneficiaries will receive the death benefit as long as premiums are paid and the policy remains in force. Hence, the incontestability clause plays a crucial role in maintaining the integrity of life insurance contracts.